Court Backs FCC VoIP Ruling

3/22/2007 10:39:00 AM Eastern

By: By Greg Scoblete

Washington — A U.S. Appeals Court has upheld an FCC ruling that VoIP providers are exempt from state regulations.

At issue was whether VoIP companies like Vonage and 8x8 should be regulated as traditional telecommunications companies, subject to the same state taxes and fees as landline providers. In 2004, the FCC had ruled that these services should not be treated like traditional telco services. Several state governments then appealed to the courts to over-turn the decision.

VoIP providers hailed the decision as a key legal victory.

“This decision is great news for Vonage, for our industry, and most importantly for consumers because it protects a young and growing segment of the telecommunications business that's geared toward providing value, innovation and choice to the public," said Mike Snyder, CEO, Vonage, in a statement following the ruling. "It allows Vonage to continue growing our business unfettered by outdated pre-Internet regulatory structures."

The VON Coalition, representing a number of firms involved in VoIP telephony, issued its own statement hailing the decision. "This decision holds open the promise that VoIP can play a critical role in boosting broadband demand and putting new tools in the hands of American consumers and small businesses to enhance productivity, manage daily affairs, and enjoy leisure pursuits. The Court's decision is a critical step towards unleashing the full economic benefits of VoIP competition, with the potential to save American consumers upwards of $100 billion over the next 5 years.”